Cryptocurrency Exchange Terms and Definitions

Don't make cryptocurrency trading harder than it should be. Trade smarter by learning the essential terms and definitions in our detailed table below.

KYC

Stands for “Know Your Customer”. Financial regulations require institutions to provide mandatory identity verification for users that transact over certain limit thresholds.

Margin Trading

Process in which a trader borrows an asset from a broker in the form of a loan in order to execute a larger trade.

Margin Funding

Lending crypto assets with interest to users looking to trade on margin.

Centralized Exchange

A cryptocurrency trading platform that functions similar to a traditional stock brokerage. Users register an account and maintain their crypto asset balances directly on the exchange.

Decentralized Exchange

A cryptocurrency trading platform that enables users to trade while maintaining custody of their crypto assets.

Stablecoins

Cryptocurrency that is pegged to an asset of stable value. USDT, TUSD, PAX, and USDC are all stable coins that are pegged to the US Dollar.

Ticker Symbol

Used to identify a crypto asset on an exchange. Very similar to a stock ticker.

Spot

Executing an order to purchase crypto assets at the current market price.

Altcoins

Term used to describe any coin that is not Bitcoin. Stands for ‘alternative’ to Bitcoin.

Wash Trade

A manipulation tactic where an investor buys and sells the same asset with the intention of creating artificial movements in the market.

Trade Volume

The combined amount of buying and selling of an asset in a given period of time. Cryptocurrency exchanges typically focus on 24 hour volume.

Volatility

Refers to rapidly changing and unpredictable price movements in asset trading markets.

Order Book

The combined list of all orders (user instructions) to buy and sell a particular asset on a given platform.

Base Pair

The asset in which a cryptocurrency is traded against. For example, the BTC/BNB pair on Binance trades Bitcoin against the base pair of BNB (Binance Coin).

IEOs

Stands for ‘Initial Exchange Offerings’. Several cryptocurrency exchanges currently provide a platform for new blockchain companies to support fundraising, marketing, and liquidity for issued tokens. The most popular IEO platform is currently the Binance Launchpad.

Deposit Address

The wallet address provided by a cryptocurrency exchange for the user to send their asset. User asset balances are updated and ready to trade when the deposit is confirmed.

Withdrawal Address

The wallet address a user provides to the cryptocurrency exchange to receive their assets.

Candlesticks

"Candles" are visual indicators used by traders to track and predict price movements.

Technical Analysis

A trading strategy that focuses on patterns and prior market behavior towards an asset in order to predict the future price movement of that asset.

Depth Chart

A visual representation of the supply and demand for a particular asset. Buy Wall - Term used to describe a large or significant buy order or ‘bid’ of an asset at a certain price. Sell Wall - Term used to describe a large or significant sell order or ‘ask’ of an asset at a certain price.

Two-Factor Authentication

An additional level of security offered by cryptocurrency exchanges to protect user accounts and balances. Common Two-Factor Authentication methods include Google Authenticator and Authy.

Maker Fee

Fees paid by users creating limit orders (liquidity) for the exchange order books. These orders are either above (sell) or below (buy) the asset ticker price.

Taker Fee

Fees paid by users when liquidity is taken from an exchange order book in the form of any executed trade order.

Market Orders

Instruction to buy or sell an asset immediately at current market prices. Market Buy - An order to purchase an asset immediately at current market prices. Market Sell - An order to sell an asset immediately at current market prices.

Limit Orders

Instruction to buy or sell an asset at a specified price set by the user. Limit Buy - An order to buy an asset at a specific set price. Limit Sell - An order to sell an asset at a specific set price.

Exchange Hot Wallet

Cryptocurrency wallets used by exchanges that are connected to the internet. While less secure, these wallets provide exchanges with easier transactions and convenience for day to day operations.

Exchange Cold Wallet

Cryptocurrency wallets used by exchanges that are not connected to the internet. All reputable exchanges keep a majority of crypto asset balances in cold storage wallets for the purpose of maximizing security.

More Cryptocurrency Exchange Resources:

Make Better Decisions With Your Crypto.
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Make Better Decisions With Your Crypto.
How We Earn Revenue